The Hindu Business Line : Gufic Biosciences mulls private placement to drive growth

GUFIC Biosciences Ltd (GBL), charting a growth plan for itself - after holding company Gufic Laboratories sold its ethical brands to Ranbaxy about three years ago - is looking to raise capital through a private placement.

Mr Jayesh P. Choksi, CMD & President of the company, told Business Line that Gufic was mulling a private placement to raise about Rs 25 crore, to strengthen research and development activities and brand building, apart from upgrading its plants to US-FDA standards.

Gufic's R&D set-up is in Mumbai and its two plants are in Gujarat and Karnataka.

Through the private placement, Gufic hopes to bring to the table a partner that would bring in expertise and not just capital, he said. And given the present market conditions, the company hopes to firm up plans in six months.

Strong brands are not new to Gufic, the erstwhile Gujarat Fine Chemicals Company, points out Mr Choksi. Mox, one of the strongest brands of amoxycillin, was among the basket of ethical products that Gufic sold to Ranbaxy in March 1999, he said.

"After Gufic Labs sold its ethical products to Ranbaxy, we had to start from scratch. It was decided that Gufic Biosciences, born in 1999, would focus on the herbal segment and use our allopathic expertise to have standardised processes for herbal ethical products," he said.

Other well-known products from the Gufic stable include: Roll-On, Care, StretchNil, Onergy and Shapes. And while StretchNil and Shapes are doing well, Roll-On will be pushed next year with some brand-extensions, he added.

Meanwhile, Gufic has embarked on a two-pronged strategy to penetrate the domestic and global markets. Given the thrust on herbal products, the Indian market would see both ethical (prescription products) and over-the-counter products.

Gufic has an arrangement with the UK-based Intra Pharmaceuticals for food supplements and nutraceuticals and has already started exporting digestives and purgatives, according to Mr Choksi. The company is working on a product portfolio for the domestic market too.

The arrangement with the UK-company was that Gufic would develop the product, which would be marketed in Europe by the partner company, he said. Gufic's H-15, is a single ingredient herbal product in the cancer segment that has established itself in the European market. Planning to intensify focus on this market, he said that about three products already exist there and contribute about Rs 8 crore in sales. This is expected to go up to about Rs 12 crore by March 2003, he said.

Gufic is also active in agri-related biotechnology and has developed tissue-cultured pomegranates that are being sold in sapling form to farmers. It has also developed and commercialised Bixa seeds for which it has a buyback arrangement, he said.

The company expects to clock a sales of Rs 60 crore for the fiscal ended March 2003 and targets Rs 100 crore in another two-and-a-half years.

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